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Libbey Inc. (NYSEMKT:LBY)

Q1 2014 Earnings Conference Call

May 02, 2014 11:00 AM ET

Executives

Kenneth A. Boerger – Vice President and Treasurer

Stephanie A. Streeter – Chief Executive Officer

Sherry Buck – Vice President and Chief Financial Officer

Analysts

Arnie Ursaner – CJS Securities, Inc.

Kevin L. Ziets – Citigroup Global Markets, Inc.

Lance F. James – RBC Global Asset Management, Inc.

Operator

Good day, ladies and gentlemen, and welcome to the First Quarter 2014 Libbey Earnings Conference Call. My name is Gwen, and I will be your operator for today. At this time all participants are in listen-only mode. Later we will conduct a question-and-answer session. (Operator Instructions)

I would now like to turn the conference over to your host today, Mr. Ken Boerger, Vice President and Treasurer. Please proceed.

Kenneth A. Boerger

Thank you, Gwen. Good morning, everyone. Welcome to Libbey’s first quarter 2014 earnings conference call. Our press release and supplemental financials were distributed this morning and are available on our website in the Investor Relations section. We are hosting a live webcast of today’s call, which can be accessed on the same section of our website. The replay of today’s call will be available on our website for 14 days.

Before we get underway, I’d like to say that this conference call will contain forward-looking statements under the Securities Act of 1933 and other federal securities laws. These statements are based on current expectations, estimates and projections about the market and the industry in which the company operates in addition to management’s beliefs and assumptions. Forward-looking statements are not guarantees of performance and actual operating results may be affected by a wide variety of factors. For a list of these factors, please refer to the forward-looking statement notice included with our SEC filings.

I would now like to introduce the members of the management team here with me today: Stephanie Streeter, Chief Executive Officer; Sherry Buck, Vice President and Chief Financial Officer; and Ronni Smith, Vice President and Corporate Controller.

I will now turn the call over to Stephanie.

Stephanie A. Streeter

Thanks very much, Ken, and good morning, everyone. Thank you for joining us for a review of our first quarter 2014 operating and financial results. Today I will provide my thoughts on our business and the current operating environment, update you on each of our reporting segments and discuss our general perspective for the balance of 2014. Sherry will then walk through our detailed financial results for the first quarter, after which we will take your questions.

So let’s begin with the first quarter of 2014. First, let me remind you that the first quarter of 2013 was far and away an all-time record first quarter in terms of IFO and adjusted EBITDA. So we faced a tough comparison in what is seasonally our most difficult quarter. Additionally, you’ll recall at the time we held our Q4 earnings call, our forecast for the full year 2014 indicated we would be above our prior year in earnings, but established that for a variety of reasons, the first quarter of the year would likely be below the prior year. We cited potential impacts of higher energy and packaging costs and the weather we had been experiencing early in the quarter. But what we didn’t anticipate was the impact of currency that affected our results.

The macroeconomic environment varied by region and channel of distribution during the quarter, as we saw very low single-digit sales growth in our Mexican and Latin American regions, our EMEA segment and our U.S. Sourcing segment. Unfortunately, on a global basis, many of our largest retail customers reported decreased traffic and average unit retail reductions compared to the prior year. Both our foodservice and retail business in the U.S. was negatively impacted by the severe winter weather, especially in January and February.

Overall, we saw approximately 1% sales decline in the quarter, which, when combined with the higher input costs for natural gas, packaging and electricity, and the impacts of currency in Mexico and Canada, resulted in adjusted EBITDA of $20.1 million compared to $26.2 million in the prior year quarter.

I’ll now review our segments and provide a little bit more color on each of them for the quarter. In total, first quarter sales for our Americas segment were down 1.3%, compared to the same period in 2013. We saw an 8.2% increase in sales in our business-to-business channel of distribution.

Our foodservice channel recovered to post a modest 1% decline for the full quarter after being severely impacted by weather in January and February. And retail sales were down 8.1% in the Americas, as our results in this channel of distribution were impacted by three things: first, our decision to exit the sale of certain low-margin items as we reconfigured our Americas manufacturing footprint. During the first quarter of 2013, we had not yet excited all of those sales.

The second was a loss of share on very price-competitive items. Again, that had not impacted us yet in Q1 2013. And the third impact was softness in consumer spending and reduced traffic, primarily as a result of the severe winter weather – especially, as I said, during January and February. Despite a challenging economic environment, our EMEA segment increased sales for the fifth consecutive quarter, with revenue increasing 0.5% over the same period in 2013. The increase in EMEA was the result of sales in the foodservice channel increasing over 19%, while the retail channel was down 3.4% and B2B was down 2.3%.

Weather also impacted results in the U.S. Sourcing segment, but the increase in volume was such that despite the lower restaurant traffic due to weather, we ended the quarter with a 1.4% increase in sales of our dinnerware and flatware products, which as you know we sell under the Syracuse and World Tableware brands. This is particularly notable, given the strong sales comparisons as Sourcing grew nearly 6% in the first quarter of 2013 versus the Q1 of 2012 and over 8% for the full year in 2013.

We believe the rate of growth in the past five quarters far exceeds the overall market growth for these products. These share gains are a positive result of our investment in additional marketing and sales capabilities and new products to meet our customers’ evolving needs and interests.

First quarter sales recorded in Other were down about $700,000 or 8.4% as a result of a decrease in sales in the Asia Pacific region. Although there are a number of challenges in China, we believe it remains a long-term growth opportunity for Libbey. As you know China’s economy is still largely based on infrastructure and exports, and growth in the consumer segment of the economy has slowed.

We made a significant number of changes in our go-to-market strategy in China to combat the issues we experienced in 2013 around the tightened credit environment, which resulted essentially in inventory destocking by our distributors; the government tightening on consumption and in entertainment, known collectively as the Eight Rules, and the resulting increased competitive environment that developed.

During the first quarter of 2014, we changed our sales organization to focus on specific geographies and opportunities, took a number of actions to stabilize pricing and introduce the most significant number of new products in one quarter in China in the last five years. Well, overall sales were down 8.4% driven largely by an unfavorable mix. Volume was flat to the prior year first quarter.

So we’re beginning to see the impact of the changes that we’ve made. And given the progress that we’re making, we believe we are positioned to deliver profitable growth in China in the balance of 2014. As we’ve shared with you before, our constant focus is to get stronger. We continue to work on improving our cost position in order to optimize our manufacturing, warehousing, and distribution network, which we should really be able to leverage in an improved sales environment.

Our realignment of manufacturing from Shreveport to Toledo and Monterrey is complete, and we expect to realize approximately $7 million of cost savings in 2014 after realizing approximately $1 million in benefits during the first quarter. We’re also continuing to ramp up on our drive to further increase productivity in all our locations. We expect the new initiative combined with the significant progress we’ve made in our 2011 to 2013 restructuring actions to position Libbey to continue to deliver industry-leading operating margins, cash flow and returns on invested capital, especially if we see an improved sales environment during the three remaining quarters of 2014.

So let me provide some perspective on the balance of 2014. In the remaining three quarters of the year, while we expect to experience some continued weakness in retail demand in the U.S. and Canada and in China, we do anticipate low single-digit organic sales growth from Mexico and Latin America and continued modest revenue growth throughout all regions of the company in the foodservice and business-to-business channels.

We have discussed how our first quarter 2014 results were impacted by the harsh winter weather throughout the United States, as both restaurant and retail traffic was impacted. In addition, many consumers felt the impact of increased heating bills. The increase in natural gas costs not only impacted consumers, but negatively impacted Libbey as we paid $2 million more for natural gas than we did in the prior year first quarter.

Essentially, I want to confirm what we said in our February call. The company anticipates that for the full year 2014, it will generate low single-digit sales growth and record slightly improved adjusted EBITDA margins compared to the full year 2013 as we work to realize in 2014 approximately $7 million in benefits of the realignment of our North American capacity.

As I said, we saw approximately $1 million in benefits of that realignment during the first quarter and we anticipate seeing nearly double that amount in each over last three quarters of 2014.

Now I will turn the discussion to Sherry Buck, our Chief Financial Officer who will further detail our first quarter results and will provide some key cash flow assumptions for 2014. Sherry?

Sherry Buck

Thank you Stephanie, and good morning everyone. I will review our first quarter financial results in each of our reporting segments, using the categories Americas; Europe, Middle East and Africa, or EMEA; US Sourcing; and Other.

We recorded sales for the first quarter of 2014 of $181.6 million compared to $183.5 million for the first quarter of 2013, a modest decrease of 1%. Sales in our Americas segment were $121.9 million compared to $123.5 million in the first quarter of 2013. As Stephanie mentioned, this was driven by over 8% growth in the Americas B2B business, offset by an 8% decline in the retail channel of distribution and a 1% decline in the foodservice channel.

Sales in our EMEA segment increased to $34.4 million, a 0.5% increase. Sales in AMEA were strong throughout 2013, when they were up 8.7% for the full year 2013 compared to the prior year. This is the fifth consecutive quarter of year-over-year sales growth in EMEA.

Sales in U.S. Sourcing, which includes our sourced ceramic dinnerware, metal tableware, hollowware and serveware, were $17.7 million, compared to $17.5 million in the prior year quarter as sales of World Tableware and Syracuse China flatware and dinnerware increased 1.4%.

Other sales were $7.5 million as compared to $8.2 million in the prior year first quarter. This was the result of an 8.4% decrease in sales in the Asia-Pacific region. The performance in Asia-Pacific region was primarily the results of continuing tight credit in China and the impact of various government regulations in China.

First quarter selling, general and administrative expenses increased $2.5 million or approximately 9% as compared to the first quarter of 2013. This reflects higher equity and other compensation costs and investments in sales and marketing programs to both drive 2014 sales results and to set the foundation for growth from new products in 2014.

Adjusted EBITDA, as detailed in Table 2, of $20.1 million was $6.1 million less than the record adjusted EBITDA of $26.2 million reported in the prior year quarter. The primary factors contributing to the change in adjusted EBITDA were higher input costs for natural gas, packaging and electricity of $4 million, weather related factors of $1.3 million and nearly $2 million in currency impacts, primarily in Mexico, partially offsetting these costs with the realization of savings of nearly $1 million from the recently completed North American capacity realignment.

Special items in the quarter, as detailed in Table 1, totaled $6 million, of which $5.3 million is related to the unexpected expenses and underutilization of capacity resulting from a furnace malfunction in our Toledo, Ohio manufacturing facility. The expenses in the first quarter of 2014 related to the furnace repairs, underutilization of capacity and transportation costs. Additionally, we incurred $700,000 in restructuring charges related to discontinued production of certain glassware in North America and reduced manufacturing capacity at our Shreveport, Louisiana facility.

As we move down the income statement, we realized a decrease in interest expense in the quarter of $700,000 to $7.7 million, primarily driven by lower debt as a result of the continuing benefit of retiring $45 million of our outstanding senior notes in the second quarter of 2013. Our focus on debt reduction and strengthening the balance sheet has resulted in a net debt to adjusted to EBITDA of 3 times, within our overall goal of 2.5 to 3 times net debt to adjusted EBITDA.

Our effective tax rate was 25.8% for the quarter ended March 31, 2014, very similar to 25% for the quarter ended March 31, 2013. We had available capacity of $75.5 million under our ABL credit facility as of March 31, 2014, with no loans outstanding. The company also had cash on hand of $24.5 million at March 31, 2014.

We invested $9.9 million in CapEx during the first quarter, compared with $8.9 million in the year ago period. CapEx for the full year 2014 is expected to be between $55 million and $59 million. Depreciation and amortization amounted to $10.7 million in the first quarter of 2014, compared to $10.8 million in Q1 2013. We expect depreciation and amortization for the full year 2014 to be between $42 million and $43 million.

Finally, working capital, defined as inventories and accounts receivable less accounts payable as of March 31, 2014, was $187.1 million, which was $9.3 million lower than the prior year number of $196.4 million. Working capital was lower than the prior year to due to higher accounts payable, partially offset by higher inventories.

As we look at our capital priorities, we have a disciplined approach to how we allocate capital and analyze all alternatives. We will look for the best returns to our shareholders as we analyze all of our alternatives, including share repurchases, strengthening of our balance sheet through debt repayments, reinvesting in the growth of our business through investments in new technology or in financially attractive acquisitions that support our strategy as well as dividends.

As we look at some of the key assumptions for full year 2014 cash flow, you should expect CapEx of $55 million to $59 million. This is higher than normal expenditure on CapEx, which includes $17 million to $18 million related to our planned investments in new technology in our Shreveport, Louisiana facility, announced last year on November 2013.

Working capital is likely to increase around 5% in dollars driven by currency impact and lower accounts payable due to the timing of expenditures in 2013 versus 2014. We expect pension expense of approximately $14 million in 2014 and cash contributions of approximately $11 million. After completion of the recent new senior secured credit facility, cash interests should be in the range of $20 million to $22 million. As far as cash taxes for 2014, we believe they will be around $14 million compared to $11 million in 2013.

We would now like to open the call for any questions. And Stephanie will have some brief summary comments at the end of the Q&A.

Question-and-Answer Session

Operator

(Operator Instructions) Our first question comes from the line of Arnie Ursaner with CJS Securities. Please proceed.

Arnie Ursaner – CJS Securities, Inc.

Hi, good morning.

Kenneth A. Boerger

Good morning.

Arnie Ursaner – CJS Securities, Inc.

The market seems to be reacting very aggressively to the gross margin that impacted Q1. Maybe you could take a step back and remind investors typically of how Q1 affects the full-year gross margin, perhaps highlight some of the unusual items that impacted it, and perhaps give us your conclusion on what you think the gross margin might look like for the year?

Sherry Buck

Okay, well. First of all, as I said, the first quarter is our toughest quarter. It’s seasonally the lowest and because of capacity utilization and that sort of thing gross margin is typically lower in this quarter than others. We also had the impacts that we outlined of natural gas much higher than the prior year first quarter of $2 million. We had input cost increases in packaging. We had weather impact us, as we were in many cases unable to staff the plants in Toledo during some of the more severe weather that we have that impacted us.

So there was a variety of things that we feel are either, I’ll call them a one-time times of costs that impacted the quarter or certainly we feel were beyond them like weather and the weather related impact to natural gas. So hopefully, that answer is that part of the question. And then, going forward we would expect our gross margins to be more like what you’ve seen overtime including the expected impact positively of the $7 million that we have from the restructuring of North America.

Kenneth A. Boerger

And Arnie, this is Ken. Just a reminder in addition to looking at gross margins for the full-year as we said, we would still expect our adjusted EBITDA margins for the full-year to be north of where we finished, which was 16.4% in 2013.

Arnie Ursaner – CJS Securities, Inc.

Okay. Two more quick questions. One is, you mentioned you had a 1% decrease in foodservice sales in North America, but you recovered to get to that level. Maybe give us a sense of how strong in March was? I know you may not have a direct or specific number for April, but maybe give us a feel for that?

Sherry Buck

Actually I might do better than that. So overall, our impact in the business, was about $3 million of loss sales for the quarter, and over half of that – well over half of that was in foodservice. So, if you take a look at our total sales of roughly $181 million if you add back the $3 million that we lost, we’d be up 1% overall for the business versus down 1%. So, it was a pretty decent impact.

Arnie Ursaner – CJS Securities, Inc.

My final question – I'm sorry.

Stephanie A. Streeter

Yes, I was just going to add that during the quarter in January and February, we are probably the toughest from a weather impact as soon as the weather got better we saw March relative within the quarter improving and it’s very early but, April is solid right now.

Arnie Ursaner – CJS Securities, Inc.

I know you gave a lot of detail by retail, and Mexico, and various things. If we looked at it on a consolidated basis, what's your view for the outlook for revenue growth for the year for overall Libbey?

Stephanie A. Streeter

Overall Libbey be low single-digits for the full year. So again reiterating what we said and the fourth call that we had in February that we would have low single-digit organic revenue growth, and that our EBITDA margins would be north of where we finished last year as Ken said that was 16.4%. So we would expect to be north of that, and then we have the $7 million of the restructuring that should impact the EBITDA.

Arnie Ursaner – CJS Securities, Inc.

So if I could sum up what I think, you basically have just completely reiterated what you said at year-end, despite the fact we have a $2 million negative hit from currency, and perhaps the market seems to be overreacting to the first quarter. Thank you.

Stephanie A. Streeter

We would certainly agree with that, yes. And yes, we are reaffirming the direction that we set in fiscal year fourth quarter call.

Operator

Okay. Our next question comes from the line of Kevin Ziets with Citi. Please proceed.

Kevin L. Ziets – Citigroup Global Markets, Inc.

Hey, good morning.

Stephanie A. Streeter

Hi, Kevin.

Kevin L. Ziets – Citigroup Global Markets, Inc.

I just wanted to talk about the retail segment for a little bit, if I could. When do you anniversary the lost and the exited business, so we get a clean picture of the trends there?

Stephanie A. Streeter

We should anniversary that in the third quarter.

Kevin L. Ziets – Citigroup Global Markets, Inc.

In the third quarter. Okay. And I guess, is the furnace that went down in Toledo fully functional at this point? Are there more add backs coming in the second quarter or beyond?

Sherry Buck

I’ll start off with that, when the furnace is back up and running, it’s came up and running at the end of the first quarter. As far as special items we will still expect to have probably less than $1 million to flow through in the second quarter as we finish up that project and the products get start things sold.

Kevin L. Ziets – Citigroup Global Markets, Inc.

Okay. So just thinking about, Shreveport is fully rationalized, if you will, you got Toledo is back up and running. I guess, when is the right time for us to be looking for you to gain back potentially gain back sales that you lost in the retail channel? Or in the foodservice channel, I guess?

Sherry Buck

Well, the foodservice channel, so we are gaining share in the foodservice channel in our U.S. sourcing business. And in our glass business, we don’t expect that we’ve lost share that our volumes have been – were up in 2013, they are flattish so far in the first quarter. So we don’t expect that we’ve lost share. But we are working hard we certainly not increased our sales and marketing expense to not see the impact on the top line. So hopefully you will start seeing that in the second quarter as the weather won’t impact us as much and we get some things rolling and the programs that we started in the first quarter.

Kevin L. Ziets – Citigroup Global Markets, Inc.

And the retail sets, when – is that a January reset? Or is that a different time of the year? Do you do that in the back half?

Sherry Buck

As we were talking about with Arnie’s question and your anniversary question, we should start seeing retail sales anniversary what we walked away from as well as the share loss that we’ve been talking about for the last couple of quarters would that should anniversary and you should see us come out of that the other side of that in the third quarter.

Kevin L. Ziets – Citigroup Global Markets, Inc.

Okay. And then just in terms of trends at retail or in the foodservice channel, is there still kind of a bifurcation between the high end and the low end, or how are you seeing that play out?

Stephanie A. Streeter

I’m not sure what you mean of bifurcation?

Kevin L. Ziets – Citigroup Global Markets, Inc.

We've seen, I guess, some higher-end foodservice channels have performed better than others. And I don't know how that correlates to your business, but also, in general in the consumer space we've seen higher-end products seem to be doing better than maybe mid-tier ones.

Stephanie A. Streeter

I think because we sell to such a wide variety of retailers, and the bulk of the product, I guess we would say is from the middle tier of those retailers. I mean if you just look at the size of retail in general. And so yes, we would see that same trend that high-end is still doing well, but for the bulk of our business we sell to, I will call it, the mid-tier retailers are a much larger. So when you look at our size of a Wal-Mart, Target, Bed Bath Beyond, etc., versus a Macy's or a Williams & Sonoma, it gets dwarfed by just the size of the retailers.

Kevin L. Ziets – Citigroup Global Markets, Inc.

Sure. That's fair. Okay. I guess I'll turn it back over and get back in queue.

Stephanie A. Streeter

Thanks.

Operator

(Operator Instructions) Our next question comes from the line of Lance James with RBC Global. Please proceed.

Lance F. James – RBC Global Asset Management, Inc.

Good morning, everyone. Two questions. One is: one of your competitors, EveryWare has been having some, I guess, well-publicized problems. Does that create an opportunity, or is that more of a disruptive influence in the market? I don't know if they may be liquidating inventory, or pricing, etc., in some desperation. So is that an opportunity, or is that a near-term disruptive element for you?

Stephanie A. Streeter

It’s a little bit of both, but we are looking at it as an opportunity. Certainly we’ve seen in the foodservice business at our U.S. Sourcing products. We’ve certainly been able to take advantage of opportunities from a number of our competitors, EveryWare being one of them. And we’ve got lots of irons in the fire. So we are looking at it as the glass is half-full, and we are going to go after the opportunities.

Lance F. James – RBC Global Asset Management, Inc.

Okay. And my second question was just with regard to your release, in Table 5, and you may have commented on this, and I'm sorry if I didn't pick it up, but your retained corporate costs went from $5.3 million to $7.1 million year year-over-year. And just trying to get a little color on that differential.

Stephanie A. Streeter

Yes, basically, you can just think about it as some of our SG&A costs as far as R&D and some of that compensation costs.

Lance F. James – RBC Global Asset Management, Inc.

That's a pretty significant increase. I was just wondering if there was something special there, or whether we ought to figure that's kind of an ongoing run rate?

Stephanie A. Streeter

Yes, so I think if you look at our SG&A kind of we take it back for the whole year, the last couple of years, our rates have been around 13%. And I would say that, we would expect for the full year of 2013 for it to be in the 2013, really for a couple of reasons. Last year we talked about, that we’ve added sales force personnel and other investments that we’re making in sales and marketing to support that. And then I say as you specifically look at Q1, Q1 is typically the rate a lot higher than our full year rates, so I think you need to, for our full year, think about in the 2013.

Lance F. James – RBC Global Asset Management, Inc.

Okay. Thanks very much, and good luck.

Stephanie A. Streeter

Thank you.

Operator

Our next question comes from the line of Kevin Ziets with Citi. Please proceed.

Kevin L. Ziets – Citigroup Global Markets, Inc.

Hi, I wasn’t thinkingI can get back so fast. Just thinking about some of the items that happened in 1Q that might not be so one-time-ish, the natural gas costs, and the packaging costs, and things of that nature, I guess given the hedging program, what are you expecting I guess inflation-wise for the balance of the year?

Kenneth A. Boerger

Yes, Kevin this is Ken Boerger. As far as natural gas as we said in the February call. For the full year, we would expect our natural gas costs might be up as much as 15% over last year and if you’ll look at the way that works out with $2 million increase in the first quarter that would anticipate about $1 million increase, each of the next three quarters and that’s baked into the expectations we have for adjusted EBITDA for the full year.

So we would expect it to be up, but not as much as the first quarter, wherein the first quarter we saw natural gas prices go to over $6 per MMBtu in February and March. They’re currently back down in the high 4s and certainly the weather had a significant on the February and March costs. So that’s what we would expect for the full year.

As far as the carton cost increase, we would have anniversaried that at the end of March and so we should see – absent another price increase later in the year, we should see similar packaging costs compared to what we had in the last three quarters of 2013.

Kevin L. Ziets – Citigroup Global Markets, Inc.

That’s helpful. And then on the M&A front, is there – I guess, I know you’re not going to tell us if there’s something specific in the works, but could you give us a sense for how actively you’re looking at different options?

Kenneth A. Boerger

I think what we’ve said is that we are actively looking at – because our balance sheet is in much better shape, and we are expecting to have increased cash flow this year, we’re starting to look at what our total capital allocation should look like. And I think as Sherry indicated in our opening remarks, we’re looking at everything, from share repurchases to dividends to M&A to continued investment in growing the business through the P&L and looking at a variety of ways to use our cash flow to create shareholder value. So no specifics to talk about at this time.

Kevin L. Ziets – Citigroup Global Markets, Inc.

Okay. And I guess, on the share repurchase front, what guides under the new credit agreement – how is that restricted or limited?

Kenneth A. Boerger

We have significant more flexibility than what we had in the past under both the senior credit facility and the ABL facility. We will have the ability to do significant repurchases, if that’s what we decided to do.

Kevin L. Ziets – Citigroup Global Markets, Inc.

Okay. This may have happened already, but is the credit agreement going to be filed with the Q? Or has it been filed?

Kenneth A. Boerger

It has already been filed.

Kevin L. Ziets – Citigroup Global Markets, Inc.

Okay. Great. I will check it offline. Thank you.

Operator

At this time I would like to turn the call back over to Stephanie Streeter for closing comments. Please proceed.

Stephanie A. Streeter

Thanks very much Gwen. Let me conclude by emphasizing that in spite of weather issues and higher input costs that we experienced during the first quarter, we believe the long-term drivers of our business model remain strong. We remain on track with our longer-term goals, including growing the top line, increasing profitability and cash generation. Our debt and operating restructuring initiatives over the past two years have strengthened our balance sheet and cost position considerably, and enabled us to put in place a very attractive new $440 million credit facility earlier this month with an initial interest rate of 3.75%.

We’re now focused on productively and growth improvement initiatives across our global operations. These steps, combined with our strong market positions, the breadth of our product portfolio, our revised focus on marketing and sales programs, innovation and superior customer service will position us well to realize value-driving benefits as demand in certain markets strengthens.

We look forward to continuing to make progress in the balance of 2014. We thank you very much for your support of Libbey. And I hope everybody has a great day. Thanks again for joining us.

Operator

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Have a wonderful day.

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